Policy Government?: Applying Policy Governance® to Sovereign States

Cover Story

Could the Policy Governance system developed by John Carver make a difference in the way we run national governments? Here, Matt Risser, who has previously worked for the Institute on Governance and interned at the Centre for International Governance Innovation, explores the potential.

OVER THE PAST FEW DECADES, the application of the Policy Governance model developed by John Carver has shifted the governance paradigm in numerous nonprofit, for-profit, municipal, quasi-public, and public organizations (hereinafter referred to as “board organizations”). As a conceptual model and operating system designed to provide owner representation and servant leadership, the Policy Governance paradigm enables board organizations to define and achieve the ends that brought them into existence and render account to their respective ownerships for having done so. Unfortunately, this same period witnessed growing discontentment with the objective setting, performance, and accountability of our most important governance institutions: sovereign states. As early as 1969, renowned management expert Peter Drucker was commenting:

There is mounting evidence that government is big rather than strong; that it is fat and flabby rather than powerful; that it costs a great deal but does not achieve much … that the citizen less and less believes in government and is increasingly disenchanted with it. Indeed, government is sick—and just at the time when we need a strong, healthy, and vigorous government.1

Drucker diagnosed this malaise as the “sickness of government,” and since his initial diagnosis, its symptoms have become ever more acute.

The divergence in macro-effectiveness between Policy Governance– based board organizations and sovereign states provides an opportunity to consider whether and how Policy Governance might be applied to states in order to improve their objective setting, performance, and accountability. Three questions must be answered to begin to make these determinations. First, what are the similarities and fundamental differences between board organizations and sovereign states? Second, what adaptations to Policy Governance theory are necessitated by the fundamental differences? And third, how must existing forms of state organization adapt to operate under Policy Governance principles? Here, I offer preliminary answers and directions for further research.

As Carver has noted elsewhere, there is much similarity between board organizations and sovereign states.2 Both serve an ultimate purpose and establish organizational policies, processes, and structures to (hopefully) fulfill that purpose; and both must render account to some ownership for their performance. All of the wisdom inherited from the Policy Governance model is therefore useful in addressing the “sickness of government.” However, two fundamental and related differences between sovereign states and board organizations render existing Policy Governance theory incomplete for the task of governing states.

The first difference lies in their “incorporating authority.” The authority under which each board organization is given legal character is ultimately its respective sovereign state, but who incorporates the sovereign state itself? Social contract philosophy maintains that states are struck under the sovereign authority of the people, in other words, by the consent and for the convenience of the governed. Therefore, while state power provides owners a clear measure of redress if a board organization violates fundamental principles, if the state itself violates fundamental principles, there is no formal or practical power available to the population beyond popular uprising against state governments.

The state’s “police power” is the second fundamental difference. As Carver remarks, “In addition to being able to tell their employees what to do, these elected bodies have [and require] the societally legitimized authority to tell the rest of us what to do as well. That is, they have law-making authority.”3 Indeed, no other board has the ultimate power to regulate its ownership or restrict the rights of its members. The appropriation of state authority from the general will of the people to the private will of the powerful is therefore an ever-present threat. It is for this reason that James Madison contended in The Federalist Papers no. 51 that, “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”4 While nebulous popular “incorporating authority” and the potential abuse of “police power” have been meticulously examined within political science and related disciplines, these fundamental differences have yet to be integrated into Policy Governance theory.

To apply Policy Governance theory to states, the core model need not be revised. It can be applied as is to all the shared issues of board organizations and states, but additions are required to accommodate the unique powers and circumstances of sovereign states. The state’s dual role, as both subservient to and having legal authority over the general population, creates structural challenges that Policy Governance has had no cause to contend with previously.

Structurally, Policy Governance approximates the roles of the legislative branch (board) and the executive branch (CEO), but it does not, and has not yet needed to, incorporate a judicial branch. How Policy Governance accounts for the judiciary is essential to resolving the fundamental gap between current Policy Governance theory and sovereign power. In board organizations, incorporated under state authority and reliant on its police power, the function of the judiciary—legal arbiter—is external; however, for state governance, it must be an internal function. Theoretical concepts such as constitutional rights, the rule of law, and constitutional limitations on the powers of the legislature as well the executive branch are all designed to prevent the appropriation of state power from the general will of the people to the private will of the powerful, and are protected by the judiciary. These concepts and the judicial function must be treated before a theory of “Policy Governance” could be made complete.

Finally, applying Policy Governance theory to states requires that their organizational structures and processes be significantly modernized. Policy Governance relies on organizational structures and processes that maintain “the separation of three distinct roles: the ownership as seat of legitimacy; board as translator or definer of the general will; administration for actual accomplishment of that will as it is defined by the board.”5 It also requires clear and direct accountability from each level to the next, administration to board, and board to ownership. This formula relies heavily on the modern principles of corporate management and establishes modern universal principles for corporate governance. Unfortunately, generally speaking, states have yet to systematically adopt principles of modern management or governance. As Carver rightly stresses, “If any group is utterly seized by the ghosts of governance-past, it is the forum elected to conduct the public’s business.”6

The governance and managerial inefficiencies and ineffectiveness of states, with which we as citizens are all familiar, are explained by two factors. First, and somewhat legitimately, the efficient concentration of power, such as the “total authority, total accountability” requirement of Policy Governance, enhances the risk of power appropriation. So while practices such as the tripartite separation of powers or legislative bicameralism violate the modern principles of management and the clear chain of accountability Policy Governance requires, they do so due to competing concerns regarding the dangers of concentrating authorities with police powers. A sometimes ineffective, inflexible, and inefficient state is much preferred to a despotic one.

Second, the current design of state organization predates ideas of modern management. It was developed under the circumstances of an agricultural society in which the state was comparatively small, society was comparatively less complex, and the pace of change was slow. Its officious micromanagement; myriad committees, commissions, and boards; and awkward juxtaposition of hyper-centralized bureaucratic authorities operating in hyperfragmented topical silos were bearable under the circumstances of an agricultural society but have utterly broken down under the complexity, interdependence, and speed of modern society and its enlarged government. While numerous for-profit, nonprofit, and some municipal organizations transformed to meet the needs of these realities, sovereign states remain foundationally unchanged. Drucker encapsulates the dilemma neatly, arguing that

Business … has had to face, on a much smaller scale, the problem that government now faces: the incompatibility between “governing” and “doing.” Business management learned that the two have to be separated, and that the top organ, the decision-maker, has to be detached from “doing.” Otherwise he does not make decisions, and the “doing” does not get done either.7

Generally, states have yet to address this dilemma and, because they have ignored modern ideas of management, have suffered the negative consequences articulated by Drucker.

Applying Policy Governance theory to sovereign states therefore offers much value to those seeking to cure the “sickness of government.” The principles of Policy Governance offer a solid foundation on which to begin updating the organizational structures, processes, and policies of states for the modern world, and reversing their long decline in effective objective setting, performance, and accountability. However, it does not offer a complete answer, and the unique powers and circumstances of sovereign states must be considered and integrated. This research agenda has tremendous practical potential, and it is hoped that the questions and preliminary answers posed here can perhaps serve as a starting point for that conversation.